Tiger Global is an investment firm founded over twenty years ago by Chase Coleman. Tiger has been investing in public and private technology companies for many years and has tens of billions of dollars’ worth of assets under management. It made waves in the venture capital industry for its investment pace in 2021.

Tiger closed a fund in 2021 that was reportedly $6.65 billion. And it closed on a $12.7 billion fund a year later (including $1.5 billion from firm employees, so $11.2 billion from outside investors) that took less than six months to raise. Read more about these funds and the firm here.

Last fall it was reported that Tiger was raising a new fund targeted at $6 billion. As of now, it has reportedly raised $2.7 billion, according to regulatory filings. (It’s still raising, and this figure could change.) Tiger’s ability to raise capital for technology investments has declined, and it’s not alone. Insight Global is a venture capital firm that reportedly has cut the target size of its latest $20 billion fund because of the challenging fundraising environment.

I don’t have inside information, and I haven’t talked to anyone at any of these firms or their LPs. But given rates paid on US Treasuries, returns required by LPs to justify illiquid venture capital investments are likely higher than they’ve been for ten years. Translation: LPs probably want venture capital funds to produce higher returns to compensate them for the risk of capital loss and the inability to access their capital for a decade. Combine that with the compressed multiples that technology companies experienced in 2022 (i.e., falling valuations), and fund managers are in a tough spot. They’re being asked to produce higher returns when exit valuations have come down (though this could go back the other way during the fund’s life).

This dynamic will likely have an impact on the venture capital industry if it continues. I’m curious to watch this and see how it plays out.